It is apparent that there is a steady stream of conveyancing technology making its way from Australia over to the UK of late: InfoTrack, PEXA, and more.
Lextech – a fintech from Australia – might just join that stream at one point in the future. Their CEO, Jack Meredith, had an interesting path to developing technology for conveyancers.
His first three years after being admitted to practice law were spent in the conveyancing environment. What’s more, this occurred at the time Victoria commenced its transition from a paper-based settlement system to one using “econveyancing”.
Here, Meredith shares his insights on digital conveyancing, synchronised settlement, the conveyancing profession in England and Wales, and more.
First of all, who are Lextech?
Since 2001, Lextech has developed software systems to assist its customers in efficiently preparing paper registry instruments for mortgage settlement transactions and presentation for lodgement to land registries and for co-ordinating manual settlement of those transactions.
Lextech’s extensive experience in the Australian property and technology market and its significant investment to date in the fundamentals of econveyancing has put it in a position to provide technology solutions and services that will be very competitive with alternatives on both useability and price in an international environment.
In Australia, Lextech (the technology) currently provides services to ~30 banks as well as thousands of conveyancers, solicitors and finance brokers. To a lesser degree, other users of Lextech are real estate agents, property surveyors, building quality inspectors, and accountants. These parties have permissions in a reduced capacity based on the nature of their role in the transaction.
Lextech’s vision is delivering an efficient electronic conveyancing platform for Subscribers to settle conveyancing transactions in a more cost-effective and secure manner, utilising modern and intuitive technology and delivering real cost savings and reducing risk for purchasers and sellers.
What are the benefits of synchronised settlement?
The Australian econveyancing landscape is synchronised to the extent that there is a substantial period between settlement commencing electronically, lodgement commencing, and settlement funds being paid to the intended recipient. Additional time is then required for funds to clear in the recipient’s account. A usual settlement would take over an hour before funds receive the recipient and can often be longer.
The current lengthy process in the Australian system introduces substantive risk and uncertainty to end users.
Taking steps to digitise registration and settlement is the overall goal. The benefits can only be realised by implementing a system that resolves the various pain points in a conveyance, rather than implementing a digital solution for the sake of digitisation.
Benefits that can be realised if approached correctly include;
- Using modern fast payment technologies to reduce the time settlement takes to complete and the time funds take to clear to bank accounts
- A robust and transparent software interface that ensures parties are able to communicate, receive important updates, and keep other parties accountable for meeting settlement deadlines
- Management and oversight by a central body to prevent future disputes arising with regard to how multiple providers interact and work together. This also allows the central body to engage and employ experienced settlement agents as the internal process experts who are responsible for overseeing the use of settlement in an electronic world
- Ultimately, no material increase in costs above those currently paid by a buyer or seller
Are there any risks or drawbacks?
The nature of conveyancing means that a substantial change – such as econveyancing – has the potential to introduce new and substantial risks if implemented without a strong appreciation of the process of conveyancing in the UK.
Whilst the land registration procedures in the UK are very similar to Australia, a risk would be to introduce a solution that heavily leverages local knowledge.
A paper settlement involves a large degree of trust between experienced providers in the sense that you trust that if you aren’t satisfied at a paper settlement, each party will hand back a cheque or document received, and settlement won’t proceed.
The risk in adopting an electronic platform to replicate paper settlements is to fail to adequately introduce the intellectual property of all parties into the platform who are involved in a settlement.
In Australia’s current system – which relies upon PEXA – banks receive lower costs and additional functionality compared to conveyancers, and the workflow of the platform caters to banks above any other party.
This doesn’t inherently introduce risk, but it was a big reason why the take-up of econveyancing did not proceed with great interest initially and forced use was required by various jurisdictions.
The involvement of conveyancers in Australia has largely been a result of a second provider seeking to enter the monopolistic market – Sympli – which counts a very large conveyancing market as its customers.
The problem the Australian regulator has been working with industry to solve over the last few years is how to introduce interoperability into the Australian market which aims to allow the two approved econveyancing providers to connect via API to allow a subscriber to use their preferred choice of provider.
In practice, the issue is a very complex problem to solve with new risks being introduced and requiring managing. It has also had the result of new fees being introduced between the two providers, which are ultimately going to be passed onto conveyancers.
In the opinion of Lextech, the situation in Australia can be avoided altogether as there is a single central registry rather than various states and territories offering their own process and solutions, with the central registry taking control of the ecosystem which the existing conveyancing providers can connect into.
How do you see the concept of synchronised settlement developing in England and Wales, and what role might Lextech play here?
Lextech is well-positioned to build a UK owned and run econveyancing system.
Project Meridian takes the econveyancing process to the level that requires a whole of industry buy in, and oversight and control via the Land Registry. To truly achieve a synchronisation of settlement and obtain as high as possible a percentage of industry buy in, it is critical for the central registry to oversee and control the wider roll out of econveyancing.
The lesson that might be taken from Australia is one that involved the registry being the overarching “source of truth”, which is critical in and of itself, but is even more important when land transfer is occurring simultaneously with the transfer of funds to and from various parties.
Conveyancers are invariably treated the same way, regardless of the country. They are offered multiple technology solutions to address various components of the conveyancing journey. However, they are more often than not (a) not involved in the process design or implementation and (b) are often left using multiple systems because of a lack of integration options between the technology platforms.
The example for the second scenario involves the various conveyancing platforms, the ability for communication to effectively flow, to avoid repeating tasks multiple times and, ultimately, to improve productivity. Rather than a conveyancer needing to use a platform, send an email, check the land registry website etc., it makes more sense for the land registry to be the ultimate hub for information verification and API management. If the various conveyancing platforms are unable to be directly integrated, it is critical to ensure this occurs at the source of information to prevent conveyancers having to carry the burden of another technology system which doesn’t solve their daily problems.
Lextech has a robust and highly used front-end platform that currently accommodates conveyancers, solicitors, banks, as well as experienced settlement agents. The work involved to bring Lextech to the UK for registration and settlement involves the back-end integrations with various parties, including the existing conveyancing technology providers.
The opportunity in the UK for Lextech is to not only provide a modern technology, but it is also to ensure minimal if any disruption or change to a conveyancer’s day to day life whilst ensuring that the costs involved with registration and settlement do not materially increase. This can be achieved by a registry owned and managed technology solution.
There are a good number of tech companies from Australia or Canada making their mark in the UK. Why do you think this is?
From my experience in working previously with a UK-based real estate company, it is due to the willingness of local businesses to innovate and to make meaningful change for their clients rather than simply adopting a new technology because it’s the flavour of the month.
How the technology companies add value to existing services is the ultimate yard stick, and Lextech’s approach is to work with industry to ensure that conveyancers are not forgotten in the change process, to ensure that banks are providing real time and transparent updates to parties, and to ensure that the issues that have arisen in the Australian econveyancing roll out are not repeated in the UK.
